Disputed Credit Accounts & FHA Loans

Mortgage and Lending with NMLS# 335055 335055

Disputed Credit Accounts & FHA Loans

The dreaded manual downgrade for loans with disputed credit items. What does that mean?
It means that the file is no longer considered approved through Automated Underwriting and must endure a more stringent Manual Underwrite. And while that is not a deal killer for many borrowers, those with less than solid files might not pass that test.

FHA Update

Well, good news:We have gotten new guidelines regarding credit items disputed on th borrowers credit report.

Guidance for FHA Lenders on TOTAL Scorecard:

If the credit report reveals that the borrower is disputing any credit accounts, Manual Downgrade of a TOTAL Scorecard Approve/Accept recommendation is not required if:

1. The disputed account has a zero balance
2. The disputed account is marked as “paid in full”, or “resolved”
3. The disputed account is both
a. less than $500, and
b. more than 24 months old, based on the date of dispute.


Tom Burris

Dallas, TX


I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!!

Your Texas FHA Expert and Dallas Mortgage Expert.


Texas FHA Loans- DallasLoanGuy



Comments (2)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Tom - Thank you for the detailed quality information about disputed credit accounts FHA loans. Excellent blog.

Jun 26, 2011 05:02 PM
Roy DuBose
Austin Distinction Realty - Austin, TX

in our Ownership Coaching Program, while loan requirements are fairly tight, the biggest hurdle to clear is a candidate BELIEVING they can own a a home then making the commitment to the process

Jun 27, 2011 01:55 AM

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